Gas heating vs oil vs electric heating: which option is right for you?

Heating costs make up over half of the UK’s household energy bills¹. Of course, when it comes to heating your home over winter, there are a few different fuels to choose from.

So let’s compare the cost of heating your home using gas, oil or electricity, and explore a few new ways to be more energy-efficient and help save money. And, because we’re OVO, we’ll also offer a few ideas on how to cut your carbon footprint and fight climate change, while we’re at it. 

What are the pros and cons of gas central heating?

Around 23 million UK homes use gas central heating. Out of a total of about 29 million, that’s a huge majority. So why is gas so popular?

Advantages of gas central heating

• Gas is the least costly option, at 4.65 p per kWh (in November 2021). kWh is the unit used to measure energy. 
• Modern condensing boilers are efficient – meaning up to 90% of the energy is used. Whether you choose combi, system or conventional, the law now says they must all be efficient condensing units. 
• Piped straight into your home, this energy source needs no storage.
• It’s simple to control – you can turn it on and off easily.

Disadvantages of gas central heating?

• Gas is a fossil fuel, so burning it contributes to global warming and climate change. 
• The UK government has recently announced that new gas boiler installations will be phased out. 
• Installing a gas heating system is expensive. Particularly if you’re not on the Grid – when it might not be possible at all. 
• Boilers should be serviced every year, to keep them in good, efficient and safe condition. 
• There are potential dangers with gas and carbon monoxide leaks. 
• Gas prices are impacted by global demand, because the UK isn’t self-sufficient. 
• When the time comes to upgrade your boiler, it’s expensive. 

Find the right boiler for you with our useful guide.

What are the pros and cons of electric central heating?

In England, only around 8% of homes are heated with electricity. With less in Wales, at 5%, but slightly more in Scotland, at 13%. This is pretty low, in comparison to gas central heating. Let’s find out why. 

Advantages of electric central heating

• Although some rural homes may not be on the gas mains supply (so are unable to use gas central heating), most homes can connect to the electricity grid. 
• Installing an electric system is usually less costly than gas. Although underfloor heating can cost a lot. 
• Very little maintenance is needed for an electric system, which means you don’t have to worry as much about annual servicing. 
• Energy plans like Economy 7 and Economy 10 could help you pay less for your electricity – though this depends how and when you use it. 
• Unlike gas central heating, electric heating systems are almost silent. 
• Modern storage heaters are super-energy-efficient, and work well with smart tech innovations like smart thermostats. 

Disadvantages of electric central heating

• At around 20.06p per kWh, electric heating bills can be pretty high. 
• About 35% of electricity on the grid is produced via gas-power stations⁵, which means high carbon emissions. 
• If you use night storage heaters and haven't had the heating on lately, you won't get the heat until the following night.

What are the pros and cons of oil central heating?

Advantages of oil central heating

• If you’re not on the National Grid for gas, oil is a good alternative, as it can be delivered anywhere. 
• Cost is lower than electricity, at 4.82 p per kWh in England, Scotland and Wales. 
• Oil is an efficient fuel, particularly with the latest modern boilers. If you have an old boiler, it’s pretty quick and easy to replace it if you’re able. 
• Oil is flammable – but there’s less risk of explosion than with gas. 
• If oil prices are low, and you have the space, you can stock up. 
• It’s easy to control and gives you heat when you need it.

Disadvantages of oil central heating

• In line with the national plan to be net zero carbon by 2050², the UK government has begun to phase out oil boilers – so no new ones can be installed after 2025. 
• Installation from scratch is tricky and expensive. 
• Oil has to be delivered by lorry and pumped into the tank – so you’ll need to make sure you have the appropriate space and accessibility. Having a huge tank in your back garden is also not the prettiest feature! 
• You need to keep an eye on the level in the tank, and remember to order a refill in good time, before it runs out.
• Your boiler and tank will need yearly maintenance. 
• If you’re keen to be green, oil is not the best way to go. It creates far more carbon emissions than gas. 

Read all you need to know about oil central heating in our new practical guide. 

Installation costs of different heating systems: oil vs electric vs gas

So you’ve read the pros and cons of each system. Now here are some examples for installing different heating systems. Plus we’ve added a couple of green solutions too. 

Electric storage heating

Once bulky, clunky and inefficient, storage heaters are now smart, modern and energy-saving. Check out our guide on how you can benefit from the sleek, lower-carbon alternative to gas central heating. Approximate cost: £150 - £700 per heater.

Gas combi boiler

A single unit that gives you both your hot water and space heating – it takes up less room than other types of boiler, and gives you hot water as soon as you turn on the tap. Find out more in our guide. Approximate cost: £2,500-£4000.

Oil fired boiler

If you’re not on the mains gas grid, an oil central heating system could be your best and most cost effective option. And it’s more efficient than gas. Approximate cost: £4,000-£6,000.

Air source heat pump

Air source heat pumps are vital in the move away from gas and towards the electrification of heat. But these systems are expensive. Costing between £2000 to £9000 to install. FInd out about grants you may be eligible for that can help towards the installation costs. 

Ground source heat pump

If you’re searching for a greener, more efficient, low maintenance option to heat your homes, consider this low-carbon solution which  uses only the heat from underground,. But with prices at around £14,000 to £19,000 for installation, they’re still a long way from being accessible for most of us.  FInd out about grants you may be eligible for, that can help towards the installation costs. 

5 ways you could save money

Depending on how you heat your home, here are some other ways you can save money:

1. Switch to a better energy tariff

Many people stay with the same supplier year after year, long after their agreed tariff has come to an end. This means they’ve probably been shifted to their supplier’s default, and most expensive, tariff. It’s worth comparing energy suppliers, and finding out how much you can save if you switch. 

Check out our guide to the types of  energy tariff available these days.

2. Take control of your heating

Here are 3 ways you could save energy and carbon emissions by being more efficient with your heating:

• If you can, try turning your thermostat down by one degree. If everyone in the UK did this, we’d stop over 8 million tonnes of carbon being released into the atmosphere per year ³. 
• Time your heating well. You don’t normally need the heating on when you’re away from home. So if you can, you can try to time it so that it’s on when you arrive back. 
• Find the ideal temperature for each room. Some rooms need to be warm, like living rooms and bathrooms. But having a hot bedroom while you’re watching telly downstairs can waste energy. Using radiator valves to zone your rooms can help.
• Read our blog to learn how to save electricity at home and reduce your bills.

3. Track your energy use with a smart meter

Another way to monitor your energy use is through your smart meter, and its portable companion, the In-Home Display (IHD). An IHD is the most effective way to track your energy use, and save money. As a result, IHDs now come as standard with every smart meter. 

Don’t yet have a smart meter? All OVO members can get a smart meter installed for free by our award-winning smart meter team⁴. 

4. Find out the many ways you can insulate

Insulating your home is a great way to make your home more energy efficient and lower your carbon footprint. There are many ways you can do this, and it can make a big difference quickly. 

Other technologies like external wall insulation, thermal walls and double-glazing cost more, and take longer to pay back, but will make a huge difference. Use our blogs to find out how these different types of insulation could save you money

5. Get a smart thermostat installed

Smart thermostats help you control your heating from wherever you are – even if you’re not at home – from your phone, tablet, or other device. Find out how you could benefit from getting a smart thermostat installed, to make your home more energy-efficient.

What are the best green alternatives to traditional gas, oil and electricity heating systems?

As the world moves towards a greener, more sustainable future, we’re constantly looking for better, more renewable ways to heat our homes. Read our useful guides to tell you everything you need to know about the low-carbon heating solutions making home energy more sustainable, and more efficient:

• Storage heaters
• Air source heat pumps
• Hybrid systems
• Eco boilers
• Hydrogen boilers

Wrapping it up

Here are a few key takeaways from this guide on heating costs:

• You can use a smart meter and an In-Home Display to track your energy use, and spot where to make small changes that could save energy
• Check out the low-carbon heating options available, if you want to cut your carbon footprint

Get a quote from OVO Energy today, to find out about our home energy plans.

Sources and references:

¹ https://energysavingtrust.org.uk/advice/heating-and-hot-water/

² https://www.gov.uk/government/publications/net-zero-strategy

³ If all of us in the UK turned our thermostats down by just 1 degree, we’d prevent 8.8 million tonnes of carbon entering the atmosphere each year. We know this because turning the thermostat by one degree you can save 320kg of carbon a year, or 0.32 tonnes (Source: Energy Saving Trust). And we multiplied this by the number of households in the UK (ONS, 2018).

⁴ https://www.uswitch.com/gas-electricity/guides/uswitch-energy-awards-2019/